Hugo Black

“ In 1941 the United States brought a complaint against appellees and several other major oil companies and their common carrier pipeline subsidiaries claiming that the pipelines were granting illegal transportation rebates to their shipper-owners under the guise of paying dividends. ”

“ The stockholder's (shipperowner's) 'share' of the carrier valuation, so the argument ran, was to be the proportion which stock-investment in the carrier bore to the carrier's total invested capital (including debt owed to third persons) . ”

“ There are also other indications that the Government's interpretation of the decree did not, originally, differ from the one appellees urge today. For example, the 1941 decree required annual reports from each pipeline showing total earnings available to owners or stockholders and actual dividends paid. For 16 years the reports made by the pipelines indicated that the dividends were not computed on the basis of 7% of the current value of the owners' investment but on the total valuation of the carriers' properties. ”